Student Loans

Rodney makes the point on his blog that many of Labour’s changes to the student loan scheme has actually helped send the level of overall debt skyrocketing.

Most students are not stupid, and now they can borrow interest free while studying, they tend to do two things – take out a loan even if they do not need to, and also borrow to the maximum possible. And then stick the loans money into investments etc.

It occurs to me that NZUSA often focuses on totally the wrong aspect of tertiary funding policy. Making the loans scheme more attractive is never a solution. If for example, as NZUSA asks for, one increased the threshold at which you start repaying, this would again just send the level of debt skyrocketing even more.

NZUSA, in my opinion, needs to focus on the issues of the amount the Government contributes to tuition costs, and the issue of parental means testing for student allowances. If fees are cheapers and more people have allowances that will decrease student debt. Fiddling with the loans scheme generally will not.